Sainsbury’s ends talks to sell Argos to China’s JD.com
Supermarket Sainsbury’s has seen shares jump higher after weekend revelations over talks to sell Argos to Chinese e-commerce giant JD.com, despite discussions swiftly collapsing.
Shares in the UK’s second largest grocery chain rose more than 5% at one stage in the FTSE 100 Index on Monday morning as investors reacted to the news.
On Saturday, Sainsbury’s said it was in discussions regarding a potential sale of its Argos business to JD.com, which is one of China’s biggest retailers, a deal it said could “accelerate Argos’ transformation”.
But on Sunday, it confirmed it had “terminated” discussions over a potential sale, saying JD.com’s terms and commitments were “not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders”.
Argos is the UK’s second largest general merchandise retailer, with the third most visited retail website in the UK and more than 1,100 collection points.
In a statement on Sunday, Sainsbury’s said: “JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders.
“Accordingly, Sainsbury’s confirms that it has now terminated discussions with JD.com.”
The statement added: “We are taking focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos whilst delivering further operating model efficiencies.”